KT reopens its CEO candidacy. Again.

KT CEO Ku Hyeon-mo speaks during a New Year’s greeting event held at the company’s office in Songpa District, southern Seoul, on Jan. 2. [KT]

 
KT decided to reopen the candidacy for its CEO post in a board meeting Thursday, restarting the candidate review process from scratch.
 
This is the second time that the candidate selection process for the top post has restarted.
 
The latest announcement came after the National Pension Service (NPS), the largest shareholder of KT, voiced opposition to the telecom company’s decision to select incumbent CEO Ku Hyeon-mo as the final and only candidate for the post in December.
 
“The board of directors decided to restart the process for CEO appointment through an open competition,” said KT in a release Thursday. Ku is expected to contend with other competitors.
 
The application window will be open from Friday to Feb. 20.
 
Internal directors of the company will not take part in the candidate review, and information regarding the screening process — from the list of applicants to the review result — will be disclosed transparently, according to KT.
 
On Dec. 28, KT’s board committee selected Ku as the sole candidate after reviewing 27 potential candidates.
 
KT’s CEO candidacy review committee had already concluded on Dec. 13 that Ku was qualified as the sole candidate to serve another three-year term as CEO.
 
But Ku asked for a further screening process and opening the process to other candidates due to “a major shareholder’s concern regarding the governance structure of companies with dispersed ownership,” according to KT.
 
With dispersed ownership, a company has no single investor with a controlling share of the entity.
 
However, following KT’s announcement on Dec. 28, NPS Chief Investment Officer Seo Won-joo said in a statement, “Our stance is that the decision is not compliant with the basic principle that CEO candidate appointment should take place through a transparent and fair process.”
 
NPS holds 9.95 percent of KT as the largest shareholder as of Jan. 18.
 
President Yoon Suk Yeol also said on Jan. 30 that “a stewardship code should be adopted at companies with dispersed ownership.”
 
A stewardship code refers to a set of guidelines aimed for active shareholder engagement to ensure responsible corporate management.
 
The final decision on KT’s next CEO will be made during a shareholders’ meeting slated for March.
 
On Thursday, KT reported 1.39 trillion won ($1.3 billion) in net profit for 2022 in a regulatory filing, a 4.9 percent on-year decrease. 
 
The decline was due to the base effect from the previous year’s one-off earnings from its subsidiary’s sale of real estate assets, according to KT.
 
The figure beat analyst expectations of 1.30 trillion won compiled by FnGuide.  
 
Operating profit came in at 1.69 trillion won, up 1.1 percent on year. Sales hit a record 25.65 trillion won, up 3 percent.
 
An increase in 5G subscribers boosted the bottom line. KT reported sales of 9.5 trillion won in the business-to-customer (B2C) telecom business, up 1.3 percent on year. 5G users took up 62 percent of KT’s total handset service subscribers.
 
KT’s media subsidiaries — KT Studio Genie, KT Alpha, and Nasmedia — reported a 25.4 percent growth in sales to 1.17 trillion won. KT Skylife, which operates cable channel ENA, saw a 35.5 percent jump in sales to 1.03 trillion won, propelled by the success of KT Studio Genie’s original series “Extraordinary Attorney Woo” which was distributed through ENA.
 
The telecom company did not hold its regular quarterly conference call with investors and analysts Thursday amid controversy surrounding the CEO candidacy.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]